Questions raised about two more state grants made under Mary Burke

Madison -- GOP Gov. Scott Walker’s administration says it will repay an additional $2.9 million to the federal government after questions were raised about two more grants that were made previously under the leadership of his Democratic challenger, Mary Burke.

Debate in the governor’s race has already focused on whether Burke’s state Commerce Department properly issued a $12.3 million award in 2006 to convince Abbott Laboratories of Illinois to expand in Wisconsin. Burke, a former Trek Bicycle executive, also served as state commerce secretary from 2005 to 2007.

Federal officials have sought repayment of the award aimed at Abbott as well as two more, one made to Juneau County worth $2.7 million and another made to the Village of Kronenwetter in Marathon County for $225,0000.

The money in each of these cases came from a federal program known as Community Development Block Grants and in each of the cases the U.S. Department of Housing and Urban Development has said the awards didn’t meet federal criteria. The state will be paying the federal government back in the coming years both by making cash payments and by forgoing future block grants that the state would have otherwise received, according to documents released by Walker's state Department of Administration.

The questions about the latest two grants were first reported on by the website Wispolitics.

In the case of the Juneau County award, it was also made by the state Department of Commerce to the University of Wisconsin-Extension to create business outreach centers.

The Kronenwetter award was made to create and maintain 30 jobs at the facility of Woods Equipment, a maker of outdoor machinery.

Burke’s campaign defended the awards, saying that the one to Juneau County alone had created 3,700 jobs.

“Mary makes no apologies for aggressively using scarce taxpayer resources responsibly to make investments that creates jobs. The fact is that each of these awards created jobs in Wisconsin and…she’s proud of her record at Commerce and looks forward to putting her private sector experience to work creating jobs and growing our economy as governor,” Burke spokesman Joe Zepecki said.

Walker campaign spokeswoman Alleigh Marre disagreed, saying as commerce secretary Burke had a responsibility not to “play it fast and loose with taxpayer money.”

“These bad deals are just two more in a series of costly failures that marked Mary Burke's time as (former Gov.) Jim Doyle's commerce secretary,” Marre said in a statement. “Seven years later Wisconsin taxpayers are still on the hook for millions of dollars as a result of Burke's bad and careless decisions."

Stephanie Marquis, a spokeswoman for the state Department of Administration, said that the Walker administration had made the usual efforts to avoid having to pay back the federal funds.

"We attempted to find other solutions, but it is not always possible for the Division of Housing to resolve problematic grants made by the former administration’s Department of Commerce," Marquis said.

In March 2006, during an election year, Burke joined Gov. Jim Doyle in announcing an up to $12.5 million forgivable loan funded through federal community block grant dollars. It was to support development of 500 acres acquired in Kenosha County by the global pharmaceutical maker.

Abbott, a major employer of Wisconsin residents based just 15 miles south of Kenosha County, had purchased 467 acres on the Wisconsin side since June 2005. Doyle and Burke and local officials sought to augment that purchase with another 40 acres paid for with the state award.

The money, $12.3 million in the end, did not go directly to Abbott.

The funds were disbursed to the Village of Pleasant Prairie, which gave them to Abbott. The company purchased the property to take off the market land that was being eyed for a private truck stop, Pollocoff has said.

Abbott conveyed the land to the Kenosha Area Business Alliance for $1 and it's been readied for development. Abbott did not agree to promise that a minimum number of jobs be created in the deal, but the Business Alliance did — 2,400 jobs within 10 years of the 2006 deal.

Kenosha-area officials felt the truck stop could impede a possible expansion by Abbott.

About Jason Stein

Jason Stein covers the state Capitol and is the author with his colleague Patrick Marley of "More than They Bargained For: Scott Walker, Unions and the Fight for Wisconsin." His work has been recognized by journalism groups such as the American Society of News Editors, the Society of American Business Editors and Writers, and the Association of Capitol Reporters and Editors.